Posted on: 30th Dec, 2010 06:23 am
we are going to refinance for a lower monthly payment. we owe $104000.00 on our 30 year, have paid for 11 years interest now is @ 8.75. and our house and property have appraised at $160000.00. is it wise to take out more money than just a straight across mtg? we are looking to go 15 years.
It might be wise, depending on what you're trying to accomplish. If all you really desire is to reduce your interest rate, then you'd be best off borrowing just enough to pay off the existing loan and take care of closing costs. Your overall thrust is excellent - moving from a 30-year amortization to 15 years; and of course, with rates substantially lower than your current rate, you could actually borrow more and still come away with lower payments.
If you need cash for something relatively substantial and you don't think you'll be adversely affected by what would end up being a slightly higher payment, then bumping your loan amount, in all likelihood, won't hurt you.
It's obviously a decision that you have to make for yourself, but I think you're on the right track, no matter which way you do it.
If you need cash for something relatively substantial and you don't think you'll be adversely affected by what would end up being a slightly higher payment, then bumping your loan amount, in all likelihood, won't hurt you.
It's obviously a decision that you have to make for yourself, but I think you're on the right track, no matter which way you do it.
While many have used their home as an atm machine.... there are good uses of home equity.
i have seen people seed their new company or pay off high rate credit cards.
it is the cheapest money you can borrow.
i have seen people seed their new company or pay off high rate credit cards.
it is the cheapest money you can borrow.
I concur, Tom - there are cases in which using one's equity works quite well. I've been one who benefitted on more than one occasion, in fact. However, I have some trepidation in recommending lines of credit given the failures in our real estate markets and in the economy in general in the last couple of years. People have lost lots and that can still take place.
As is usually the case, there are no simple answers to questions that require a bit more information than you have provided before anyone can give accurate and useful information.
An immediate question I have is why are you still carrying an interest rate of 8.75% on a 30 year loan? Rates have been well below this for many years now. First step is to know what your actual credit scores used by mortgage lenders are and what derogatory information is in your credit report. Something must have been keeping you from refinancing by now that may still need to be addressed before moving forward.
An immediate question I have is why are you still carrying an interest rate of 8.75% on a 30 year loan? Rates have been well below this for many years now. First step is to know what your actual credit scores used by mortgage lenders are and what derogatory information is in your credit report. Something must have been keeping you from refinancing by now that may still need to be addressed before moving forward.
